The price of Bitcoin in Nigeria has recently seen a tremendous increase due to the efforts of the Central Bank of Nigeria to promote a digitalized cash system. As of writing, 1 BTC on the Nigerian crypto exchange NairaEX is currently valued at 17.8 million Naira, which translates to a fat $38,792. This represents a 60% premium over the current market price of Bitcoin, which stands at around $23,700.
The Central Bank of Nigeria has been implementing various measures to encourage a shift to a cashless society. To this end, the bank has imposed restrictions on ATM cash withdrawals. As of January 9th, citizens are only allowed to withdraw a maximum of 20,000 NGN ($43.50) per day, with a total limit of 100,000 NGN ($217). The restrictions were introduced just days before the circulation of new Naira banknotes with the aim of curbing inflation and money laundering.
However, despite the extended deadline to exchange old banknotes for the new currency, the process has been met with long lines and complaints of insufficient time.
This is not the first time the Bitcoin premium has surged in Nigeria. In February 2021, the Central Bank of Nigeria banned regulated financial institutions from providing services to cryptocurrency exchanges, which drove the BTC premium as high as 36% at the time.
Nigeria has recently become the leading country for Bitcoin web searches, according to Google Trends. The recent interest in Bitcoin has also led to the launch of the “AfriGo” card scheme by the Central Bank of Nigeria, designed to offer better access to bank card services and provide a domestic alternative to foreign cards like Mastercard and Visa, which often charge expensive fees and exchange costs.
In conclusion, the push towards a digitalized cash system and the restrictions on ATM cash withdrawals in Nigeria have driven the demand for Bitcoin, leading to its current surge in price. The Central Bank of Nigeria’s efforts to promote a cashless society, combined with the recent launch of the “AfriGo” card scheme, suggest that the country is committed to modernising its financial system and providing its citizens with alternative options to traditional banking methods.